Five Steps To Become A Successful Investor :

Choosing the investment products according to your goals and your time frame helps in creating the desired corpus, but the truth is that very few manage to stick to their investment policies. Many get greedy when the market rises; people who say 'this time it's different' often end up making terrible investment mistakes.

But worry not, we have the solution for you, to simplify your investment and to make your investment goal-oriented, so that you can know how better you can achieve your goals-whether you are planning to purchase your dream home or want to become a crorepati. Realizing your dream is now within your hand's reach. Follow the below mentioned steps to improve your financial standing and for a better future:

 

Save Money Systematically: Not only do systematic investments lend discipline to our personal finance; they also help in saving money regularly which, many a times, gets wasted in non-discretionary expenses. Make a commitment of putting some amount of money every month into Monthly SIPs. SIP investors get the benefit of rupee cost averaging. If you had invested through SIP in any of the top-5 performing large-cap mutual funds, you would have got an astounding return of more than 65% in the 1 year period and 35% in the three year Period. So, save first and spend later. That way, you can control your monthly household budget as well.

 

Curtail Your Expenses: How often do we buy something which we generally don't use? There is a difference between need and want, and often, we get caught in buying the products or services we don't actually require. Your neighbour purchasing a swanky car doesn't make a case for you to do the same. Really, neighbour's envy is not the owner's price... that was just a marketing gimmick. Make a wise decision before committing to huge expenses that may lead to stress on finances. Have you ever thought that by just curtailing your expenses by 10% every year, you can double your savings in 7.5 years? Before splurging, think how hard you work for earning that money.

 

Make A Financial Plan: If you don't know exactly where you're going, how will you know when you get there? The objective for investing is very important while choosing your investment avenues It is necessary to first set a time frame and chart your goals (Child education, retirement planning, home buying), and then choose the investment which matches your objective and tenure.

 

Don't Invest For Quick Returns: Everyone has the temptation to make a quick buck or get abnormal profits from investment. More often than not, persons end up losing their life savings. While historically, equity has beaten every other asset class, be it gold, FDs or real estate, in terms of returns, it has taken its own time in doing so. There is no free lunch in the equity market, so due diligence is required. It is better to invest through a mutual fund where a professional manages your money and provides you steady returns in the long run.

 

NO Last Minute Investment: Research has found that many people make their investment at the time of tax filing, just to save some amount, but in the process, end up buying products which they don't necessarily require. For an efficient tax planning, one should always plan from beginning of the financial year.

By following the above steps, you may not become wealthy in a short span of time, but it will definitely give you peace of mind and a sizable corpus in the long term. Make sure you remember this rule by legendry investor Warren Buffett - 'Rule No. 1: Never lose money; Rule No. 2: Don't forget rule No. 1'.

Information Courtesy : Karvy Value Blogs